India's forex reserves rise to touch a life-time high of 507.64 US billion in the second week of June

India's forex reserves rose to by USD 5.942 billion to touch a life-time high of USD 507.64 billion in the second week of June 2020 that ended on June 12, 2020, helped by a significant jump in the foreign currency assets (FCA), RBI data showed.

According to the weekly data released by the Reserve Bank of India, the foreign exchange reserves, in the previous week ended on June 5, 2020, crossed the half-a-trillion mark for the first time after it surged by a massive USD 8.22 billion and reached USD 501.703 billion.

According to economists, the increase in foreign exchange reserves is due to higher capital inflows and also due to the narrowing current account deficit (CAD) as trade activities have come to a standstill due to the disruptions caused by the COVID-19 pandemic. This amount of forex reserves will be sufficient to cover the country import for one year, they said.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation and depreciation of non-US units like Pound, Euro, and Yen held in the foreign exchange services.

The RBI data also showed that the gold reserves rose by USD 821 million in the reporting week to USD 33.173 billion.

Besides, the special drawing rights with the International Monetary Fund (IMF) were up by USD 12 million to USD 1.454 billion. The country's reserve position with the IMF also rose by USD 3 million to USD 4.280 billion during the reporting week.